Shippers Urged to Adopt New LTL Freight Classification Codes
Effective July 19, the National Motor Freight Classification (NMFC) system will undergo significant changes to simplify the 90-year-old rating system for less-than-truckload (LTL) freight. Shippers are advised to familiarize themselves with the new codes immediately to ensure accurate pricing and minimize reclassifications.
Focus on Density
The revised system will emphasize density, expanding density ratings from 11 to 13 subprovisions. Approximately 2,000 items will be removed from the existing 5,000. These changes will allow carriers to price shipments upfront with greater accuracy, reducing waste in the supply chain.
Accurate Information Crucial
When creating bills of lading, shippers must provide accurate information, including weight and dimensions. Accurate density calculations are essential for competitive pricing. LTL carriers calculate costs based on distance, time, and space, with space being determined through freight dimensioning technology.
Avoid FAK Designations
Shippers using freight all kinds (FAK) designations are overpaying. Carriers add extra margin to FAK quotes to cover the risk of underpricing. Shippers should provide full shipment details to avoid these higher costs.
Early Adopters Gain Advantage
Carriers will prioritize shippers who embrace the changes early. As market demand increases, carriers will allocate equipment to those who understand their costs and provide accurate data. Those who are slow to adapt may face capacity constraints and higher prices.
Key Takeaways
* NMFC changes effective July 19
* Focus on density for more accurate pricing
* Provide accurate weight and dimension information on bills of lading
* Avoid using FAK designations
* Early adoption of changes provides competitive advantages